Though most people have heard of cryptocurrency by now, few people understand all of its intricacies. Indeed, many people only know about the scams and investment failures that plague the crypto world.
While we won’t be explaining the intricacies of the blockchain or giving any crypto investment tips in this article, we will dive into some lesser-known facts that are worth knowing.
1. Crypto gains are taxable
Many people were attracted to crypto because of its decentralized nature, but that doesn’t mean the profits you make from selling crypto are tax-free. The truth is that if you make any gains from crypto sales, you’ll need to plug them into an income tax calculator and be prepared to give the government a share.
Crypto exchanges don’t report income to the tax department in the same way an employer would. However, governments across the world have pledged to pay close attention to crypto earnings. So if you don’t want to be hit with an audit, it’s best to be honest about your earnings.
2. You could create your own cryptocurrency
Anyone can mint a coin, and at the time of writing, there are more than 12,000 in existence. Of course, while anyone can mint a coin, not everyone will have the technical know-how to get it done. If you’re interested, you’ll need to either create your own blockchain, modify an existing one, or hire a blockchain developer to do the hard yards for you.
3. Millions of dollars worth of Bitcoin has gone to waste
To be able to make transactions with your cryptocurrency, you’ll need a crypto wallet. However, if you lose the hardware on which your wallet is stored or forget the keys to access it, you may lose your cryptocurrency altogether. Estimates are that around 25% of all Bitcoin is lost, and most of these lost coins belong to early investors who are now kicking themselves due to the incredible value the cryptocurrency has reached.
One of the most excruciating cases comes from the UK. A fellow by the name of James Howells had 7,500 bitcoins but accidentally tossed out the hard drive that had his wallet on it. As you can imagine, he’s desperate to get it back, so he’s been petitioning his council to excavate the local landfill. Here’s hoping he finds it one day!
4. No one knows who invented cryptocurrency
Of course, the inventor (or inventors) certainly know, and perhaps they have a few friends who really know how to keep a secret. However, apart from this close-knit group, no one knows who invented Bitcoin – the first cryptocurrency. Satoshi Nakamoto is credited as Bitcoin’s inventor. However, it’s known that this is a pseudonym.
5. China is cracking down on crypto
China was once a major crypto player, accounting for around 65% of all mining. However, the government recently banned mining and all services related to crypto transactions. Their crackdown was swift and incredibly effective, with China now representing 0% of all mining worldwide.
Of course, there are likely still people running covert operations and trading crypto with the use of VPNs (Virtual Private Networks). However, the government ban has had a powerful stifling effect. This goes to show that while it is decentralized, crypto is still vulnerable to government interference.
Whether you’re considering an investment or simply curious about crypto, the facts above are all worth knowing. However, we will say that if you’re tempted to try your luck trading crypto, you should do as much research as possible before diving in.